The perceivable changes to the audit profession in vietnam in light of the 2025 ifrs adoption

The necessity of topicThe adoption of International Financial Reporting Standards will bring aboutmany significant changes to a developing economy such as Vietnam.. CHAPTER 1: INTRODUCTI

The perceivable changes to the audit profession in Vietnam in light of the 2025

IFRS adoption

Researchers: Vũ Phương Chi

Tạ Ngọc Anh

Lê Ngọc AnhHoàng Diệu LinhNguyễn Hà Thu TrangClass: AC2015B

Science advisor: MSc Nguyễn Trà My

1 The necessity of topic

The adoption of International Financial Reporting Standards will bring aboutmany significant changes to a developing economy such as Vietnam One of thosechanges will be related to the labor force, such as regulators, practitioners,accountants, and auditors, among many others It is expected that with differentaccounting standards, the job of accountants will change accordingly But will it be thesame for auditors? The common perception about the audit profession is that auditorsevaluate evidence and documentation about clients’ business transactions and activities

to ensure clients comply with relevant assertions (such as accuracy, completeness,existence, valuation, occurrence, classification, cut-off,…) in order to give an opinionabout whether the financial statements are true and fair Therefore, the accountingstandards that the clients adopt should not affect the job of auditors because auditorsonly need to know if the company is doing what it says it is doing The researchersdecide to choose this topic we all wish to work in audit (in Vietnam or abroad) when

we graduate; therefore, this topic is of utmost importance to us because it directlyhelps us understand our future jobs

CHAPTER 1: INTRODUCTION

According to Decision 480/QĐ -TTg 18/3/2013 of the Prime Minister,Ministry of Finance orientates to switch from usingthe Vietnameseaccountingstandards (VAS) and apply International Financial Reporting Standards (IFRS) from

2025 for all companies The adoption of IFRS will bring about many significantchanges to a developing economy such as Vietnam From the researcher’s point ofview, on behalf of auditing students, it is strongly believed thatthere is aneed to studyabout the impacts of these changes in Vietnam This paper aims to study theimplications on the audit profession of IFRS adoption in Vietnam so the authors canunderstand in great details what awaits ahead Through this study, the reserchersexpect to discover key changes and recommended solutions to handle the changes aswell This could be considered a great preparation for new graduates applying foraudit positions Furthermore, the research results might be a good premise for furtherresearch within the field

The primary method applieddoing this research is to collect background datathrough the reading of related materials, as well as studies of our predecessors, inwhich we partially understand someuseful knowledge related to IFRS Then, to betterunderstand the case in Vietnam, the research method used was personal interviews andsurveys The reason for using personal interviews is primarily because this is themethod we consider most useful for gathering insights into our research topic Face toface conversations will make the information we collect the most accurate and direct,much more so than gathering information from secondarysources.In addition, surveysare useful for gathering information on a large scale in a short time The researcherscan get the responsesfrom many people with the same question, from which to drawthe trend of the most accurate answers.

The main research participants of the interviews are those working in theaccounting and accounting field, who have important responsibilities in their industrybecause they will have experience to provide high-confidence answers.Furthermore,they can give us some suggestions for our topic with their own personal experiences.These suggestions are helpful in creating questionnaires for the following section.Thesurvey section consists of two surveys The main participants of the first survey wereemployers from accounting and auditing firms in Vietnam They keep the mainresponsibility for recruiting so their requirements for applicants are also what newgraduates need to cultivate for themselves Therefore, their response to the change inaccounting standards is one of the important issues we need to be concerned about.Thesecond survey was attended by students who had recently graduated from universityand wished to work in the accounting profession immediately The researchers want tofind out the importance of IFRS to them as well as the things they prepare forthemselves to find a dream job This is a very important point because one of the mainobjectives of the research is to understand the reaction of graduates withnewaccounting standards

The research structure consists of five parts: Introduction, Literature review,Methodology, Findings &Discussion and Conclusion& Recommendation

CHAPTER 2: LITERATURE REVIEW

This chapter proceeds to establish a background context for the study bygaining an insight into existing literature and providing conceptual and theoreticalground for this research The chapter is divided into 3 main parts, whereby the firstpart introduces a general overview of IFRS, the second part looks at how the nationshave been approving IFRS and the third part analyses in more detail IFRS adoptionand the case of Vietnam.

1 IFRS - Benefit and drawback

In the global economic integration trend, IFRS is becoming more and morepopular in many countries and territories around the world IFRS brings bothadvantages and disadvantages to users

1.1.Benefit

Simplicity for new or small investors

According to Tan (2017) from Quy Nhon University, IFRS creates transparencyand enhances accountability by reducing information gaps between internal andexternal The standard of finance report is simpler and better with news and smallbusiness when IFRS puts both small investors, entrepreneurs and other professionalinvestors in the same position, it seems to be an impossible with the previous reportingstandards adopted, and this also helps to diminish risk for new or small investors,(Anna, J., 2013)

Better performance management for compliant companies

After implementing IFRS, it is able for business to measure their operations andcompany finances more accurately and the stage is set to improve businessperformance which helps businesses operate more efficiently through global andreliable standards that apply to both economies (International Financial ReportingStandards benefits of application - Implications for Vietnam, 2017) Business will alsogain better insights into the operations of their competitors, customers, and partners asthey make the transition , the specific benefit of IFRS to compliant company isimproved financial reporting and tax planning, upgraded day-to-day operations, bettermanaged resources, minimized cost of capital (Rick,Y.,2012)

Standardization of accounting information

The article “6 Advantages and Disadvantages of Adopting IFRS” showed thatbusinesses using similar standards to prepare financial statements can more accurately

compare with each other The author said that IFRS is very useful when comparingbusinesses that are based in different countries, as they may, otherwise have differentmethodologies and rules in preparing these documents To clarify this matter, “Impact

of IFRS disclosures on organizational performance” indicates that IFRS disclosuresuses principles-based philosophy, the goal of principles-based philosophy is to arrive

at a reasonable valuation and there are so many ways to achieve this goal,with thisprinciple, the company can self-regulating conformity with particular situation or theinvestor have the greater comparability to better identify for investment plan

1.2.Drawback

Not yet adopted in all countries

Until now, United Stated and some countries do not use IFRS, in particular:United Stated uses General Accepted Accounting Principles (GAAP) and Australiauses Australian Accounting Standards (AASs) (Mark, T B et al, 2009) The authorfound that accounting by foreign businesses like America operating in anothercountries which use IFRS are facing difficulties because they have to prepare financialstatements using different standards with their country

Costly transition

The expenses occurred in relation to the application by multinational companies

to adapt new accounting standard (IFRS), training costs or hiring accountants orconsulting assistant, however; Alison Fox (2014) point out that it seems to be overcapacity of small companies can bear Furthermore, the author made a comparisonbetween a small company and larger ones and concluded that the smaller company willbear of a financial burden rather than the larger in this area To support for this author,SunitaNishad showed the evidence that US companies spend over $8 billion for totalcost of transition and smaller ones spend around $420,000 in average per year

Limited training

In case of Vietnam, International Human Resources training for the application

of IFRS is still limited Currently, only a few international professional organizationssuch as ACCA, CPA Australia, and ICAEW have IFRS training program but thenumber is not much Some auditing firms such as Big 4 have just trained mainly forcorporate employees However, the majority of accountants in enterprises are thosewho directly formulate financial statements have not been trained and approach IFRS

Almost all universities have not implemented IFRS training for students that leading topoor understanding of IFRS on students (International Financial Reporting Standardsbenefits of application - Implications for Vietnam, 2017).

2 IFRS adoption all around the world

IFRS are list of standards to provide the financial reporting language of theglobal capital markets so that company accounts are understandable and comparableacross international boundaries (PwC 2017) In recent time, 119/143 countries in theworld required their domestic companies to applied IFRS (Huy, D M., 2017)

2.1.Developed countries to deal with IFRS

The United State is using their own accounting principle to report the financialstatements called US GAAP According to Hana & Danuse (2009), a lot of similaritiesare shared between IFRS and US GAAP in revenue recognition section such as thedefinition, the measurement, sale of goods, rendering services and long-term contractscombining and segmenting However, they are different from each other in deferredpayment and long-term contracts revenue recognition (Hana, B & Danuse, N., 2009) The European Union (EU) passed a regulation that required all companies listed in EU

to use IFRS for fiscal year after 1 January 2015 Accounting quality in EU after thisadoption based on many elements This idea is strongly supported by Naomi & Kevin;they argued that there are three factors are hinge of IFRS adoption in EU: the standardquality, political system and financial reporting incentives (Naomi, S.S & Kevin, J S.,2007)

As mentioned above, IFRS adoption in EU is mandatory, so it brings manydifferences compared with voluntary The researchers consider two particular countries

in EU: Finland and German because Finland adopted IFRS mandatorily while this wasvoluntary in German a long time before it became mandatory throughout EU

Finnish face with many troubles when they are mandatory IFRS adoptersbecause their domestic standards differ significantly from those of IFRS (Henry, J

& Anna-Maija, L., 2012) As a result, the authors found that earnings, book value ofassets and liabilities are not match anymore under IFRS so they had to revaluethese things However, Henry & Maija (2012) also concluded that IFRS providethem larger information range to predict future cash flow

By contrast, with Finnish, Germany is voluntary IFRS adopters soon in the1990s The key difference between IFRS and German GAAP (HGB) are 2 categories:the recognition and measurement of assets and liabilities and consolidation procedures(Soledad, M., Jordi, P., Anselm, C., 2005) To deal with this, the researchers figuredout that there are 7 adjustment types can be used: goodwill development costs, PPEdepreciation, pensions, deferred tax, provisions and hedge accounting.

Not only do EU countries transition and adopt IFRS, but this is also the case insome Asian countries, the most significant of which is China A group of Chineseresearchers came from four different universities concluded that their countriesadopted IFRS in 2007 and it leads to several changes in earnings management and thevalue relevance of accounting measures (2013) In particular, the value relevance ofreported earnings increased while earnings smoothing decreased with the standardchange (Liu, Yao, Hu & Liu, 2013) Because of IFRS adoption, Chinese companieshad lower demand for hiring auditors and leads to the decreasing of audit fees in China(Lin & Yen, 2009)

2.2.IFRS adoption in developing countries

IFRS brings more benefits to Nigeria rather than costs Abdulkadir (2012)figured out that thanks to adopt IFRS, Nigeria is now attracting more direct investmentfrom foreign countries (FDI) and reducing many cost of doing business and becomemore international However, Nigeria had to cope with a lot of challenges related toframework, campaign and training of personnel (Abdulkadir, M., 2012)

South Africa – an important part of Africa officially adopted IFRS in 2005 and it led tosome specific changes in accounting quality (Daniel, A., 2013) By creating a logisticregression and testing in 3,950 variables, researcher concluded that earnings qualitywas not improve after the adoption however the value relevance was, so in generalIFRS brought benefits This statement was totally opposite with the opinion of Wyk &Rossouw (2009), they indicated that the recognition and measurement of IFRS do notprovide useful information for users

Kenya is a small country in Africa and they adopted IFRS very soon in 1999 Aresearch (2011) conducted by an auditor in Kenya found that there is a less earningsmanagement, more loss recognition and value relevance after his country adopted

IFRS Furthermore, the eight-matric calculation of author indicated that the accountingquality in Kenya was developed after IFRS adoption (Erick, R O., 2011).

To sum up, IFRS adoption in developing countries gain a lot of advantages,especially from FDI so the cost of capital were lower (Francesco, B & Raynolde, P.,2012) Vietnam is a continent of developing countries so all of these studies can bepremises for research in Vietnam Moreover, almost all of research and articles aboveare focus in accounting quality but quite few studies about audit As a result, ourresearch is expected to shed light for this new area

3 IFRS and case in Vietnam

3.1.VAS in Vietnam

Vietnam is in a strong, comprehensive and economic development process,building a platform for market-driven, open and integrated business (World Bank,2017) Along with economic innovation, the Vietnamese Accounting System has beenthoroughly improved, step by step approaching and integrating with the internationalprinciples, regulations and standards (Anh & Ming, 2012) The process ofestablishment and development of the market services sector of Vietnam Accountancyhas achieved many great achievements: Based on International Standards on Auditing(“ISA”) the Vietnamese auditing’s legislation system has been studied, compiled andpromulgated compatible full, detailed and clear to appropriate with businessenvironment in Viet Nam According to KTC’s review, Overview on the Audit Practice

in Vietnam, in 1990s, legal framework for audit was formed with the issuance ofregulation on state audit, independent audit and internal audit Also be stated in thisreview, in 1999, the Government attempt to complete and put in to practice the firstseries of six Vietnamese Standards on Auditing, being constructed from ISA Whichaim to bring reliable and transparent financial information source for investors andpublic?

As of 30 May 2005, there are 33 independent audit standards - VSA issued bythe Ministry of Finance, most of which were closely adapted from ISA, except for theVSA 1000 - Audit of Finalized Report for Construction Completion, all other VASs aregenerally equivalent to the corresponding ISAs (Overview on the Audit Practice in

Vietnam, KTC, 2012).

Conforming to Accounting Law, 2003, Vietnam Corporate Accounting systems

is stipulated by Law on Accounting, below the law regulation for guidance of law onaccounting such as decisions, decrees, circulars, official letters, and VietnameseAccounting Standards

Following Anh & Ming (2012) in table 1, until now, Vietnamese AccountingStandard (“VAS”) consist of 26 standards and 5 phases; Vietnamese Standards ofAuditing (“VSA”) includes 37 standards relevant to ISA and Vietnamese AccountingLaw

Although auditing legislation in Vietnam was adapted to international standard,the quality of the audit practice is still a question In Vietnamese Accounting Reformand International Convergence of Vietnamese Accounting article published onInternational Journal of Business and Management, authors pointed out that VAS /VSA still has many unclear issues and problems that remain in conflict betweenstandards or the lack of consistency between standards and guidelines of that standard

In addition, the legal system of Vietnam is very hierarchic, using a lot of forms, papers,through many stages at many levels, causing the work to be delayed, complicatedunnecessary (Anh & Ming, 2012) This comes mainly from the fact that the accountingsystem in Vietnam is too focused on control rather than the ability to manage risk andefficiency, making it difficult for foreign firms to invest in Vietnam (Lai Thi Thu Thuy,2012) The rising issue now is how to apply these standards at the firm level in localauditing firms in an understandable and practical way?

.2 Key differences between VAS and IFRS

There are significant differences between Vietnamese Accounting Standard(VAS) and International Financial Reporting Standard (IFRS) (PWC 2008) According

to Huong et al (2011), the overall level of convergence between VAS and IFRS is atmoderate level, about 66% In particular, the authors concluded that the convergence

in measurement accounting rules is at higher rate, 75.8% compare to the convergence

in disclosure accounting rules, 61.9% PWC (2008) when comparing VAS andIFRS/IAS has pointed out that there are 12 IFRS/IAS non – existence in VAS which isequivalent, just 8 VAS are fully implemented with IFRS/IAS, and almost theremaining VAS are issued based on old version of IFRS/IAS In addition, since VASwas released, it has not amended by Ministry of Finance, despite of the change in

IFRS (Dung, H.T et al, 2012) Therefore, it created the big gap between VAS andIFRS We can compare this with other countries, in particular, China After a lot ofamendments and alteration, the final “New Accounting Standard” of China issued on

15 February 2006, is appraise as harmonized with international accounting standard.Cigdem, S & Sinan, A (2008) stated that the distance between Chinese AccountingSystem and International Accounting Standards is now closer than the past practice;however it still keeps its collectivist, conservative and long-term attribute andstructure

Furthermore, Huong et al (2011) also mentioned the reasons for low level ofconvergence between VAS and IFRS is “time lag” All twenty six VietnameseAccounting Standard are promulgated in the period from 2001 to 2005, and are based

on the International Accounting Standard (IAS) that is issued prior to 2003 (Huong et

al, 2011) As mentioned above, from that period to present, there were not anyamendments implemented, while IFRS/IAS is constantly updated in response to rapidchanges in business environment Therefore, the IASB amendment to IAS and the newIFRS after 2003 is not included and adopted in current VAS, with the exception ofVAS 19 (2005) is issued based on IFRS 4 (2004) For example, the VAS 21 aboutpresentation of Financial Statement is based on previous version of IAS 1 (PWC2008), as a result, it make “financial statements prepared under VAS may have variousclassification and presentational differences compared to financial statements preparedunder IFRS” Dung, H.T et al (2012) also discuss that lack of quantities is also thereason why VAS has significant gap compare to IFRS Specifically, there are manyVAS that do not have accounting interpretation which equivalent to IFRS/IAS (Dung,H.T et al, 2012) From 2006 to present, IASB has promulgated many new IFRS/IAS;however, Ministry of Finance has not considered issuing equivalent VAS.Nevertheless, the authors also point out that these new IFRS/IAS is still difficult toimplement and not popular in Vietnam Therefore, the Ministry of Finance should havethe drafting and gradually promulgated to ensure the new accounting standard bothappropriate with the characteristic of Vietnam and reduce the gap between VAS andIFRS (Dung, H.T et al, 2012)

.3 Adopt IFRS in Vietnam

At the moment, Vietnam plans to apply IFRS by 2025 step by step Accordingseminar “IFRS - Trend and roadmap for adoption in Vietnam” in December 2016,Director of the Accounting and Auditing Policies Department under the Ministry ofFinance, Mr Vu Duc Chinh said that one of the biggest problems in VAS was it cannottotally reflect assets and liabilities when IFRS have done in accuracy way Therefore,the application of IFRS is essential if Vietnam hopes to deeply integrate with the worldeconomy (Vu D.C., 2016) In the seminar proceedings, the policy makers separated theprocess of applying IFRS into four main phases:

 Phase 1: In 2017 - 2018, we organize the research activities and workshops

to get comments from economists, enterprise owners and university professors for thedraft of VAS/VFRS and IFRS Besides, taking the first step to assess influence of theIFRS application and selecting some entities to apply the IFRS pilot

 Phase 2: In 2018-2020, 10 to 20 IFRS standards will be chosen to beofficially applied for all the companies listed on the stock market We will continue topropagate and promote IFRS for enterprises, auditing companies and universities

 Phase 3: In 2020 - 2023, some additional IFRS standards would be puttinginto practice (expected increase by 30 standards)

 Phase 4: In 2023 - 2025, all firms in Vietnam have to complete theirconversion process

By the example, in article Revenue reporting’s global makeover Kien (2017)claimed that International Financial Reporting Standard 15 Revenue from Contractswith Customers was issued by the International Accounting Standard Board in May

2014 and will take effect on January 1, 2018 It provides a model of revenuerecognition from contracts with customers and replaces previous interpretations andstandards This can be seen as an initial movement of VAS to IFRS in Vietnam

As of the time doing this research, there is little or no paper that determines theimpaction of applying IFRS into Audit Profession in Vietnam Thus, we hope that ourpaper will become one of the first scientific researches in this field of study From ourpoint of view, Audit Profession is influenced by the changing from VAS to IFRS tosome extent These influence will be clarify in the Results and Discussion parts of theresearch

CHAPTER 3: METHODOLOGY

According to the main objective of our research, which is to understand theimpact of the 2025 IFRS adoption in the Vietnamese audit profession, it is necessary tohave a logical and structured procedure for the research that would best aid ininvestigating this new research problem To present the procedure of our researchclearly, we will discuss in turn the research type, sampling method, source of datacollection and study techniques

to gather an in-depth understanding about IFRS adoption under the profession’sviewpoint (particularly, though interviews)

2 The sampling method

In this study the sampling method used is the non – probability samplingtechnique, with the combination of quota sampling method and convenience sampling

method(Cooper and Schindler, 2003).Compare with probability sampling,

non-probability sample is not conductedby a randomized selection process Subjects in anon-probability sample are usually selected based on their accessibility or by thepurposive personal judgment of the researcher With limited time and resourcesconvenience sampling and quota sampling is chosen since their ease and sense ofinitiative to access appropriate subject Because of the specialization of the research,the respondents chosen are auditors, recruiters of audit companies, accounting andauditing students, which aim to collect professional attitude and expert’s opinions tocontribute to the result of study become more reliable and persuasive A list of 10accounting and auditing companies (KPMG, Delloite, EY, PWC, HSK, AIC, AGS,DFK, AASC, VDB)was selected to distribute questionnaires and conduct interviews

3 Source of data collection

Our research problem is a newlyarising issue so secondary sources have proven

to be limited and inadequate to ensure quality of the research results Therefore, itseems to be appropriate to concentrate on gathering information from primary sourcessuch as interviews and surveys from people who have experience in audit aspect.Although these data collection methods are demanding and time-consuming, they trulyhelp to perform the analysis and make valid conclusions

4 Technique and procedure

This research was conducted using two distinct methods of data collection:interviews and questionnaires, each of which are presented in detail as follows

i Interview

The first approach in collecting information and data of this scientific research

is to interview Interviewing is a very popular way of doing research There are twocommon types which are face-to-face direct interviews and indirect interviews In ourstudy, we applied both methods We have conducted six interviews, of which four weredirect and two were indirect We will take a closer look at the implementation process

in the following sections

The main respondents of interviews are the experts in InternationalAccountancy Profession, experienced auditors, and experienced lecturers fromuniversities in Vietnam We have selected people in the international workingenvironment who are having access to IFRS in various forms Four auditors from Big

4 companies Delloite, PwC, KPMG and EY were interviewed In addition, theresearchers have approached accountants of a large enterprise in Vietnam that is SunGroup Last but not least, we chose to interview an International Accounting lecturer

of our university

There are three following reasons to explain why we chose these people First

of all, auditors at international companies are the ones who know best about thecurrent application of IFRS in Vietnam They have to follow the government'sroadmap to make timely changes in their work with both domestic and foreign clients.They are knowledgeable about both VAS and IFRS, so we chose to interview them

Secondly, the businesses are those that directly apply IFRS Vietnam is at the firststage of the transition, so small and mid-sized companies have not had this access andapplication while large corporations have gradually moved in this regard Therefore,Sun Group - a leading multinational corporation in Vietnam - has been selected by us.Finally, the researchers want to understand that in the transition process whether oureducation system has a corresponding shift or not That is why researchers haveinvited a lecturer from International School - Vietnam National University toparticipate in the interview.

Interviews can be described as a qualitative research technique which is

“conducting intensive individual interviews with a small number of respondents toexplore their perspective on a particular idea, program or situation” (Boyceand Neale,2006) Specifically, in this research, we will implement the semi – structure interviews

As mentioned in the literature review, the topic about the change to the auditprofession in Viet Nam in light of the 2025 IFRS adoption is the new problem, andthere is little or no paper that have adequately studied it before Therefore, with thatsuch a new topic, it isbelieve that the semi – structure interview will help the authorsexplore the new insights for the research In the semi – structured interview, theresearchers will design a list of themes and questions to be covered; however, it willvary from interview to interview As deemed appropriate, additional questions maybeasked to clarify and further expand certain issues depending on the flow of theconservations

In particular, the interviews are mostly conducted face – to – face However,because the time of conducting the interview is at the end of the year, which is inauditing season, therefore, it was difficult for the researchers to arrange theappointments with some respondents Thus, with those situations, electronic interviewswere conducted, specifically through email

The questions in the interviews are mainly open questions, which focus toanswer the questions “what”, “how”, and “why” The content of the questions list isdivided into two parts Firstly, the researchers want to focus on the impact of IFRSadoption into the change in audit profession in Vietnam In this part, the questions aredesigned to explore the impact from general scope to specific scope, in particular, isthe impact to the Vietnamese accounting standard to the impact to Vietnamese

auditors In addition, the researchers also want to discover the opportunities anddifficulties that Vietnamese auditors have to face when IFRS is adopted The secondpart of the questions list is focus on the training system for auditing students How willthe training system in universities be changed? Whether the change of accountingsystem will be a challenge or opportunity for Vietnamese students? What are theexpectations of recruiters for the graduates when Vietnam adopts IFRS? We expect theanswer for these questions to be investigated in this part.

The detail of the questions list will be enclosed in the Appendix1

ii Questionnaire

The second approach in collecting information and data of this scientificresearch is to give out questionnaires To measure the perceivable changes to the auditprofession in Vietnam in light of the 2025 IFRS adoption, the researchersconducted asurvey among students who had recently graduated from colleges or universities withaccounting & auditing major (graduatedless than one year and expected to work inaccounting & auditing fields) and students who have started work as auditors oraccountants Because the limitation in time and capacity, the researchers will not dosurveys in all accounting and auditing students in Hanoi, instead of that, theresearchers decided to do the survey in a sample The population is unlimited, thesample size is calculated based on the formula:

(KPMG, Delloite, Ernst & Young, PWC, HSK, AIC, AGS, DFK, AASC).Furthermore, to increase the validity of research, a further 100 questionnaires weredistributed to training centres of CPA, ACCA, ICAW The questionnaire will be sent tothe object of study through company official e – mail and hand copies in their trainingclass The survey will have the assistance of the curators in company and directcollection by researchers The result of the survey will be collected by the curatorsthen will be sent back to the research via e – mail and directly in training centre.

To be more clear about the perceivable changes to the audit profession inVietnam in light of the 2025 IFRS adoption, the researchers decide to find out theeffect of changes to accounting & auditing firms and the expectation of recruiters withcandidates, who will directly interview and evaluate the graduated students, theresearchers sent the questionnaire to 10 recruiters from 10 accounting & auditingcompanies of different scales (KPMG, Delloite, Ernst & Young, PWC, HSK, AIC,AGS, DFK, AASC, VDB).Beside some well-known companies in accounting andauditing field, questionnaires were also sent to smaller companies in order to comparethe difference between the recruiters The survey will be used the non – probabilitysampling technique The questionnaire will focus on exploring the necessaryconditions of applicant for employer consideration This is the important phase in theresearch because the result of this phase will raise the reliability and objectivity ofresearch

Our first survey with employer consists of 5 questions

 The first question is rating question Its objective is to figure out thenecessity of IFRS with the company in which the employer is working It can be seenthat the more important IFRS is perceived, the higher the expectations from recruiters

 The next two questions aim to find out whether a relationship exists betweenknowledge about IFRS and the competence of employees in the employer’s point ofview and how it effects the opportunity to be recruited The second is a rating questionand the third is a multiple choice question

 The fourth question is an open question because researchers do not want togive an oriented question, by contrast we want responders to give their own opinions

We suppose to understand more about the expectation of employer to employees not

only about knowledge but also other aspects We look forward to find out many otherfactors that can impact the final decision of recruiters.

 The last question is a multiple choice question In this question we discussabout the ability to adapt to working environment of employee who have greatunderstanding about IFRS We aim to discover whether they have higher productivitythan other people who do not have professional certificates

 The second survey focus on new graduates who want to have a job onaccounting or auditing major

 The first question is a dichotomous question Through this we expect tofigure out whether a relationship exists between gender and the possibility to berecruited In our opinion, gender is a significant factor that need to be take into accountwhen research about job opportunity, especially in a Asia country like Vietnam

 The second question asked about the major that responder used to take intheir universities It can be seen that students from other majors can apply for anaccounting or auditing job, so we want to know whether it can impact their jobopportunity

 The two next questions aim to find out about the responder’s educationallevel From this and combine with result of other questions, we can understand partlyabout the competence of responders and the importance of IFRS and professionalcertificates in accounting and auditing career

 The fifth and the sixth questions asked about responder’s job status and timeneeded to find that job (if any) These questions will help the researchers discover thepossibility to be accepted for a job Furthermore, we can know how other factorsinfluence this possibility when associated with result of questions above

 The seventh question is a rating question Researchers expected tounderstand the role of IFRS knowledge or professional certificates to job opportunitywhen the job experiences have been excluded We hope to answer the question thatwhether new graduates with good preparation in IFRS can have better opportunity tobecome essential applicants

The last question to enquire more about other factors that need to be taken intoconsideration for students that have just been graduated from university and expected

to have a good job The researchers want the respondents to give their answers based

on their own experiences without any biased guidance, so that is reason why openquestions were designed

The detail of questionnaire will be enclosed in Appendix 2

CHAPTER 4: FINDINGS & DISCUSSION

Interviewee 1 is Deputy Manager of Assurance Service in PwC

Interviewee 2 is former Auditor in Deloitte, Lecturer at IS – VNU

Interviewee 3 is senior manager from KPMG

Interviewee 4 is Audit Manager in EY

Interviewee 5 is former Auditor in EY, Lecturer at IS – VNU

Interviewee 6 is the former Auditor in Deloitte, Financial Manager of SunGroup

The interviews were conducted in a semi-structure format Therefore, thequestions asked were not identical across all interviewees, but they followed acommon theme The following 5 statements illustrate the 5 topic areas that werediscussed with all interviewees, and a synthesis of discussion of each theme is alsothoroughly presented

Theme 1: It is necessary to adopt of IFRS in Vietnam.

Responding to the question whether Vietnam should adopt IFRS or not, mostrespondents believed that IFRS should be applied and have to be applied in the nearfuture Explaining thisviewpoint, Interviewee 1 – Deputy Manager of AssuranceService in PwC said that, Vietnam is still an emerging market which is neither maturenor saturated Therefore, there is an abundance of potential investment opportunitiesavailable in this market However, when foreign investors decide to invest inVietnamese market, they have to deal with the barriers of language, legal framework,and “business language”, in particular is accounting standard system, so that the

adoption of IFRS will have a lot of advantages and help the investors feel moreconfident when making decisions The other reason is provided by Interviewee 2(former auditor in Deloitte, and is a lecturer in IS – VNU) is that there are more andmore countries in the world who have adopted or are in the process of adopting IFRS,and if we do not change, the global competitiveness index and the transparency infinancial statement of Vietnam will most likely be adversely affected In addition, all

of the respondents who support the adoption of IFRS think that the roadmap foradoption should be step by step Interviewee 6, the former auditor in Deloitte and now

a financial manager in Sun Group, believes that the change in whole standard at thesame time will deeply influence the Vietnamese economy, especially with theenterprises which do not have direct benefit from integration This point of view is alsosupported by opinion of the Interviewee 5 (former auditor in EY, lecturer in IS –VNU), that the entire adoption at present is infeasible and a vain attempt, the roadmapfor adoption in Vietnam should be detail scheduled and planned beforeimplementation Vietnam can learn from the experience when adopting IFRS in manycountries in the area such as Malaysia or Cambodia Some other developed countriessuch as Singapore or Korea build their own accounting standard based on IFRS, calledSingapore GAAP and KFRS, because they do not want to lose initiative and control.Therefore, the problem about whether to adopt IFRS partially or entirely should becarefully considered by the Ministry of Finance and other related parties

However, Interviewee 3 – senior manager from KPMG - has different opinionsfrom other respondents He states that the adoption of IFRS in the near future is notnecessary, because the current accounting standard – VAS still performs very well, andthe adoption of IFRS will significantly waste resources, such as time and money Thereason for the difference in respondents’ opinion can be major audit work thatInterviewee 3 is responsible for is within domestic companies that rarely havetransactions with foreign firms, so that in his opinion, IFRS is not too important Theopinion of Interviewee 3 represents for a lot of small and medium – size companies inVietnam

To prepare for the adoption of IFRS, the legal framework and human resourcesare the factors that the respondents consider to be essential, in particular is thequalified human resources with deep understanding about IFRS and the legal